Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
A government shutdown is only hours away, and Wall Street seems resigned to the fact that federal services won't be running at full speed tomorrow. Just after 2:30 p.m. EDT the Senate voted down a plan that could have averted a shutdown because it was tied to a one-year delay in Obamacare. Barring a last-minute deal tonight, the government will shut down nonessential services tomorrow. The market doesn't like what it sees, with the Dow Jones Industrial Average (^DJI 0.56%) down 1.01% and the S&P 500 (^GSPC -0.88%) off 0.78% with 20 minutes left in trading. However, it doesn't look like investors expect a long shutdown or a default on the nation's debt, or stocks would have been falling for weeks. This is a blip on the long-term radar unless Washington fails to act by the Oct. 17 deadline to increase the debt ceiling.
On a company level, Procter & Gamble is one of the Dow's biggest losers, falling 2.2% today. Competitor Unilever said sales growth would slow from 5% to between 3% and 3.5% in the third quarter. The company said weaker currencies would impact growth -- a downside of a stronger dollar. This will likely impact P&G as well, although I wouldn't be too alarmed today, because currencies ebb and flow; a weakness this quarter may turn into a strength in the next next.
One of the few Dow stocks resisting the market's drop today is Intel (INTC -2.40%), which is down a modest 0.35%. The company's energy director, Hannes Schwaderer, said Intel plans to take a "significant chunk" of the smart-grid market for microprocessors, another growth avenue for the company. This follows an early move into wearable devices and a focus in lower-power-consumption smartphone and tablet chips at Intel. These new markets may turn around stagnant revenue and turn the chip giant into a growth company again. Schwaderer said he thinks the smart-grid microprocessor market could be $5 billion by the end of the decade, so significant market share would certainly help Intel.
I still think this is one of the best stocks on the Dow, and it's these kinds of growth opportunities that will turn this from a value stock to a growth stock in the future. While Intel might be behind on smartphones it's turning that loss into a chance to look forward as new markets emerge.
